Earnings

Edison Yu's reiterated Nio as their top pick for China electric vehicles and kept Buy rating for the stock.

Nio delivered 25,059 vehicles in the second quarter, above the upper end of its previous guidance range of 23,000-25,000 vehicles.

Yu's team maintained its Buy rating on Xpeng, saying they believe Xpeng's assisted driving technology is undervalued over the long term.

In the first half, CATL's gross margin was 18.68 percent, up 4.2 percentage points from 14.48 percent in the first quarter.

Xpeng will also launch a C-class model in the second half of next year to bring an ultimate experience to a user base that needs more space and comfort.

"Even if we embed some degree of conservatism, this suggests further demand deterioration in Aug/Sep on a sequential basis."

Xpeng expects third-quarter deliveries of 29,000 to 31,000 units, up only about 13 to 20.8 percent year-over-year.

While Li Auto management continues to believe that the new flagship full-size L9 SUV will sell very well, near-term demand for the Li ONE has been grossly overestimated.

Li Auto expects third quarter revenue to be RMB 8.96 billion to RMB 9.56 billion, below market expectations of RMB 13.98 billion.

Edison Yu's team expects Xpeng deliveries to trend toward the weaker side in August, with no significant recovery until the fourth quarter when the G9 SUV is delivered.